choose between private philanthropic civic organization faith based organization services funding and delivery and public sector programs i think that in both instances we've got a job crisis we've got a poverty crisis we've got an inequality prices crisis and that when all is said and done an effective solution to that what i would argue is a much more urgent set of needs can surely draw upon both a particular strength and the private sector so i'd i'd push away the notion that we have to make that choice i do think that some of the ways in which some deductions including the charitable deductions are structured wind up giving unnecessary advantage to wealthier households we have limited benefits for the philanthropic and charitable sector itself and that there are likely better ways to fund the kinds of organizations that are doing important community work ok

leslie you want to feel that same question go ahead. yes last last year americans gave over three hundred billion dollars to all sorts of charities we've calculated the effects of some of the tax proposals being considered in washington and our best estimate is that that amount would drop to about two hundred ninety five billion maybe two hundred ninety billion depending on the state shape of the economy tax deductions make a difference but not all that big a difference and there's a good reason for that when americans look at charitable giving they're not looking to give support to the kinds of things they expect government to do but rather to support the kinds of things they don't expect government to do all those small organizations some of which serve the needy but others serve other people environmental groups arts and culture groups and yes television stations all those

are the objects of charitable support and we like to encourage that through public policy because we believe that having many different ways of serving the public is much prefer both to having just one way through government written richard how do you react to that it doesn't make that much of a difference. well i think you know the figures he mentioned that it would make a lot of difference to the people who are who are receiving the contributions and in fact studies show that that for about thirty percent of givers and particularly those who give the six and seven figure gifts it would make a difference in how much they give if they lost their charitable contribution and one of the i certainly but i think i don't think it's any kind of a contradiction here and i want everybody to dixon though i mean if they want to do a good thing just give the money they're thinking about a tax cut well well of course and who are just going to lay all sort of where it is that i don't like your contributions are going they're disproportionately going to

the symphony to the opera to alumni organizations those are not necessarily contributions that are going to be doing anything to improve the wellbeing of populations who would otherwise be in actual need so i think that we've got is there a separate here and actually a lot of are we going to read your i don't know your interest that reaches beyond i have a lot of a lot of i'm going to alumni institutions that end up funding scholarships for those who are who are in need i was the recipient of one of those scholarships when i went to princeton university one of that i was the first person in my family to go to college i was able to go to princeton university because in a large part of alumni giving that funded those scholarships that make princeton and harvard and yale and other schools like that far more meritocracy than they used to be which is what america should be about allowing those who are gifted and

those who are talented and those who are working hard to have an opportunity to rise and in a time when we're concerned about a lack of social mobility i think that we don't want to do anything that's going to harm those kinds of scholarships secondly. it's going to tell me you're going to. what twenty with billion dollars twenty five billion dollars it would seem to me a pretty poor allocation of resources and when we look at aim well it's live. i don't know i want to go lesley say i don't have any free time you're ok leslie generally ever you're never enjoying your government it's awfully. it's awfully patronizing to say that the needy don't benefit from symphonies and museums and a cleaner environment and so on in fact you could argue that one of the real problems are cultural institutions face today is they don't get enough giving in as a result many of them are charging admission fees that would have been unheard of

a generation ago the price of tickets to the opera or to the symphony are way beyond the reach of ordinary people who have every much a desire to enjoy beautiful music or beautiful art as people with educations at harvard columbia princeton or indiana university so i think we have to recognize there's nothing for me to disagree with erin separate work and while there are much more urgent and pressing needs. i don't disagree with that at all i like what i mean if you know there are there is a use in new york city that make them so as old and well i think there are very different when i was talking about hoing talking about homelessness. leslie do you want to reply to that to keep going you're perfectly welcome to give your money to those. you're perfectly welcome to give your money to those sorts of things that's what philanthropies all about if you believe that something is of urgent need

support it organize a group to do something about it we also elect representatives to congress and a president to make decisions that they believe in their capacity as elected officials are in the broad interest of the public we have multiple ways of doing this just because you. agree on. things you are not something that is of great priority doesn't mean everybody has to agree on a stephen quickly reply then i'll go back and read but i think that that gets to a much more urgent kind of question which is is that to talk that that too much is in fact left to the caprice of private charity and to the arbitrary individual decisions of philanthropists deciding what and where they will support in one of the reasons that we have much higher rates of poverty much higher rates of child poverty much higher rates of elderly poverty much higher rates of infant mortality than do most of the nations in western europe and nordic countries is that we have a much more constrained and constricted public sector that all else equal is much

more efficient and effective at providing basic human needs of food shelter access of education etc and i think that in some ways sort of we we miss the ways in which we out lie among the rest of the nations in the world and the costs that we bear in relegating so much that private philanthropic sector ok richard i want you to jump in there you've been very patient well if you it's going to be well first of all america is a country that is very pluralistic and there are many people who want to give their money to organizations that will not be restricted in the way the governments restrict it in the way it does help people who are less fortunate for instance. we know that faith based charities have a far more successful right in. for instance in prison systems we have

separate authorities as i don't there's a country and i believe and i believe i know there actually is there actually is a great deal of compelling evidence i believe in separation of church and state i believe that the government shouldn't be. putting faith into what it does in helping but faith does help in fact in the texas prison system the colson based ministry when it was doing faith based rehabilitation in the prisons they had no one come back to prison that's a one hundred percent success rate and they had two people who actually extended their prison time and turned down being let out early in order to finish their commit but there's no public system that's doing that and the reason is is that with faith based charities you can feed the soul and spirit as well as the body ok stephen and i got to you twenty seconds before the break go ahead that's a very tendentious reading of the evidence there is no consistent evidence that private delivery of service is per se any more effective or efficient than public

ok let me jump in here and we're going to wash your car a diversity and add to that a short break we'll continue our discussion on charities and taxes stay with our team. choose your language. fully recover though influential still some of the. treatments that the consensus here can. choose to opinions that invigorating to. come choose the stories get into the life choose me access to your office.

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ok let's see if i go back to you in bloomington how much of an impact you rich people really make on charities in the united states is it really huge well the basic characteristic of american philanthropy is its democratization and we estimate that two thirds to eighty percent of all households give at least something in some way to charity in philanthropy in the course of a year now wealthy people because they are wealthy or give larger amounts and so

the total giving probably about but is it because. paul who he said because of a tax cut. no it has nothing to do with taxes very little to do with scots what it has to do with is a sense and we've studied we have done several studies of high net worth givers and they feel they have an obligation to give back to their communities to try to express through their philanthropy what they believe to be in the public interest to do it well the point is that the money that people give away just like my money or steve's money or richard's money is money they made they have a right to do with it what they want what's really interesting in the united states and certainly much different than you find in other countries is how many people choose to spend their money on things that they believe to be of public benefit we can argue about that as we have been doing but nonetheless the motives are all are

usually to try and figure out some sort of solution to a public need even how do you feel about that and the impact of the mega rich well i mean i think that in some ways that's that's a fairly sort of narrow and naive reading there are all kinds of motivations for giving some of them are absolutely al true istic and it's very difficult indeed to object to that but some of that are ego some of it is about getting your name plastered on a symphony building or a new campus building some of it is purely social much of the charitable giving that happens in new york city is i'm not arguing that they're incompatible i'm saying that there are multiple purposes here that it's not necessarily being driven by altruism i think that that's that's naive and that's a narrow reading i think what's missing from this conversation however is the perspective of people in need of human services my interest and that the ways in

which. one of the things that sometimes sometimes faith based organizations do is demand prayer first before a meal service will happen and that's an abuse of private power that's so cool we're jhon of people who are vulnerable and with little sort of power themselves and little ability to push back against and one of the virtues of a public program that is well run and administered notice that caviar that is well run administered is that it doesn't discriminate in that kind of way it is an arbitrary and that kind of way it doesn't run the risk of abusing the charitable power relationship in that count of way and that too often private charity requires

that people present themselves as supplicants rather than how i think the record i think is reasonable story do you need to refine that go ahead sir. first of all first of all i would i would reject this reprehensible any group that required any kind of faith affirmation our prayer before any kind of assistance people who are who are nonprofit that are religious are make pledges on it tell you that and most of the time they don't most the time they don't and i think i've probably had more experience with them than you have both working in them and given to them in administering them and also. but i do think that a lot of americans want for people to have the option of having a spiritual component as well as a physical and economic component and many americans choose that frist as we are far more successful in drug rehab programs that have

a face component no one should be forced to go to a face component drug rehab program and if the public is paying for it then it shouldn't have that face component but there are many people who benefit from having a face component and there are many americans who want to give of their own money and get a charitable contribution for it to go and to give money that would allow groups to have faith based components in drug rehab programs and other programs i should have part of the parallel you next on american greater than i did i thought ok stephen jumping ahead of me why should the tag cover that. well i think because that long as the tax code doesn't the tax code should not discriminate against religious organizations versus non-religious organizations it should treat them equally and should give all of. this and

ford foundation the. carnegie foundation these foundations are the envy of the industrialized world and they are there because americans are generous and they give there's no question that some people especially at the higher end give more if they. we subsidize them we encourage them to the tax code because of what we think they do bring to us not because we think they're perfect there certainly abuses among some charities it's an old story. portrayed in his famous play major barbara for

example but we think that on balance that charities add something valuable to a pluralistic society opportunities to serve populations that might not be addressed by government unique and innovative approaches to dealing with public problems. high standards in arts or musical symphonies there are whole variety of things they do that contribute to the fabric of life in a free society charitable giving and philanthropy are inseparable from a free society they're expressions of what people think are good and beautiful and stephen should we get the tax code out of this completely i mean i you know all else equal i don't necessarily have an objection to sort of certain narrowly targeted kinds of incentives that operate through the tax code that produce the kinds of outcomes that we collectively through democratic processes decide that we

value i think the problem is that i line myself by the way that everything that just leslie leslie just said i think that's absolutely right the line i draw is the kind of claim that richard is making that somehow there is something uniquely positive about the united states is distinctive reliance upon the private philanthropic sector and he may point to to the ford in the carnegie and other foundations being the envy of the world but americans by and large fare worse across a whole host of dimensions than almost all the people in all rich democracies it doesn't work as as as as a means by which we provide basic human needs as a supplement as a way in which to offer particular kinds of services particular kinds of arts programs particular kinds of education programs that are outside the purview of what government does and does well in. regular basis that's terrific the problem is

that it's coming at the expense of effective inefficient government programs social security fifty percent reduction in the elderly poverty rate over what it would be otherwise and all else equal are dirt cheap program to operate food stamps incredibly efficient and far more decision endless soup kitchen or food pantry leslie you want to jump in there we should loot loot yeah we shouldn't lose sight of the dollars here if we got rid of all the tax deductions for charitable giving in the federal income tax code the treasury would have about an additional fifty billion dollars worth of revenues now keep in mind that isn't a three point six trillion dollar federal budget fifty billion dollars probably be enough to pay for the food stamp program of the law i'm not sure of that either it's not a great deal of money wouldn't but we do produce a great deal of value ok richard i'd like to go to you i mean are charities

a substitute for bad public policy. no i don't i think that reflects the pluralism of the united states we as a very pluralistic people are very uncomfortable with the idea of the government sponsored religion or censoring religion that we should that should be left to the people to decide for themselves but there are many americans who want that faith based component that spiritual component in education they want it in attempts to rehabilitate people who have fallen victim to drugs or people who are coming out of prison or in other ways and i think the government's very wise to give a charitable contribution charitable deduction for people who want to give in that way it encourages them to give more now you know seventy percent of americans don't itemize so they don't get the charitable deduction and they give disproportionately that seventy percent who are pushing toward toward the lower end of the economic

spectrum they give higher percentages of their money to to a charitable contributions to and to charitable causes both religious and non-religious but among that twenty percent or thirty percent who do who do itemize we know that the charitable deduction increases the dollar amount significantly if a person is going to give a million dollar gift and they're in the top tax bracket they give a million dollar gift and they give a million dollars instead of having to give six hundred thousand because they got to pay four hundred thousand taxes on it first that makes a big difference you ask the red cross you ask other disaster relief organizations if that doesn't make a big difference it does all right gentlemen on that now we're going to have to end the program many thanks again to my guests and national new york and in bloomington and thanks to our viewers for watching us here see you next time and remember crosstalk rules. ok let me flip it on.

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